WisPolitics Budget Blog

After Republican lieutenant governor candidate and state Rep. Jean Hundertmark yesterday criticized Gov. Jim Doyle's property tax freeze for its lack of enforcement options in the second year, a new memo from the Legislative Fiscal Bureau seems to show there would still be ways to challenge municipalities that exceed the levy limits.

In her release Tuesday, Hundertmark said:

With his veto pen, the Governor sunset the limits as of January 1, 2007. For the 2006 tax year, the state would not be able to assess penalties on municipalities that did not strictly adhere to the property tax limits until after the sunset date. The Legislative Fiscal Bureau believes this could prevent the state from assessing those penalties. Without those penalties, a municipality could increase their property tax levy above new construction without the threat of losing state aid.

“A limit without an enforcement mechanism is easy to ignore,” Hundertmark said.

A new Fiscal Bureau memo released Wednesday, addressed to Democratic Rep. Mark Pocan and written by fiscal analyst Rick Olin, says even with the sunset, there would still be remedies to take on communities that exceed the limits.

For one, Olin writes, taxpayers could challenge municipalities that violate the levy limits.

"Aggrieved parties, including taxpayers, have the ability to challenge levies in violation of the limitation by making a claim against the local government or through a judicial proceeding."

Alternatively, Olin says, the state Department of Revenue could choose to impose an aid penalty in 2007

"If the statutory language governing the penalty's imposition is found to be ambiguous, DOR could maintain that its action reflects the Legislature's intent in establishing the penalty."

See Hundertmark's release from Tuesday: http://www.wispolitics.com/index.iml?Article=42250
See Wednesday's LFB memo: http://www.wispolitics.com/1006/_LFB_memo_Aug._10.pdf

According to the Legislative Fiscal Bureau analysis, Gov. Jim Doyle's budget vetoes bring state appropriations to $25.8 billion over the next biennium, compared with the Legislature's, which set appropriatoins at $25.5 billion.

Tax collections will increase by $30 million thanks to Doyle's vetoes, according to the LFB, rising from $24.43 billion under the Legislature's document to $24.46 billion under Doyle's.

The guv's budget also has higher expectations for tribal gaming revenues. The legislative budget estimated gaming revenues of about $160 million. Doyle's estimates gaming revenues of nearly $205 million.

According to Doyle's office, that discrepancy, which is due to a change in the timing of a $40 million payment from the Potawatomi, is "only an accounting difference that doesn't have any real effect on the state's bottom line."

Doyle spokesman Dan Leistikow explained further:

"The Legislature's budget had $160 million in tribal gaming payments expected in '06 and '07. However, after the Legislature prepared its budget it became clear that one $43.6 million payment from the Potawatomi would not come in in '05, but would happen in '06 or '07 instead. Thus the governor's budget numbers include the higher amount for '06 and '07."

State Rep. and Lt. Gov. candidate Jean Hundertmark issued a press release today ripping Gov. Jim Doyle for talking the talk but not walking the walk on the property tax freeze.

“The Governor is selling Wisconsin’s property taxpayers false hope,” said Hundertmark. “He promised the people two years of restrictions on their property taxes. While it is not as long as the Legislature wanted, it was still better than nothing. Now, after we get a chance to review his actual budget language things are coming to the surface. The language just doesn’t seem to match the Governor’s message.”

With a stroke of his veto pen, Gov. Jim Doyle dismantled a fee increase that nearly caused Sen. Mary Lazich to walk out on the Joint Finance Committee.

It was very early in the morning of the very last Joint Finance Committee budget meeting when Lazich proposed increasing copy charges in probate court by a dollar. Read this post to see what happened next.

In the end, suffice it to say, the increase passed.

But Doyle was obviously unimpressed with the hard-fought Lazich victory. Here's how it reads in the LFB Partial Veto Summary:

ITEM D-1. REGISTER IN PROBATE COPY FEE
As passed by the Legislature, Assembly Bill 100 would have increased the copy fee charged by the register in probate from $1 per page to $1.25 per page. The Governor's partial veto deletes this provision.
[Act 25 Vetoed Section: 2448m]

Said Doyle spokesperson Dan Leistikow, "This was a last-minute, middle of the night fee increase with no debate or discussion why it was needed. Citizens would be saddled with this Republican fee increase, without any reason to think that court services would be better as a result."

The Legislative Fiscal Bureau has released its Summary of Partial Vetoes of 2005 Wisconsin Act 25, a snappy, 82-page tome, perfect for light summer reading. Enjoy.

Senate Majority Leader Dale Schultz didn't say as much, but it would be safe to assume he didn't get the answer he most wanted from the Legislative Council. Last week, the Richland Center Republican asked the agency to check into whether Gov. Jim Doyle's vetoes are constitutionally correct.

Today, in a press conference in the Senate Parlor, Schultz reported that there wasn't much to report. "While we were hoping for some answers, what we wound up with was a whole lot more questions," said Schultz, who was accompanied by Assistant Majority Leader Neal Kedzie. Schultz said Doyle went far beyond what previous governors did with the veto pen. "What the governor has done is certainly breathtaking by any standard," Schultz said.

The cost of a legal challenge was discussed with the lege council, Schultz said. While no specific numbers were brought up, he said his understanding was that such an endeavor would be "quite expensive." Asked what he meant by "quite expensive," Schultz said he considered it to be "double-digit figures." But, he said, "There are great principles here at stake and we should not lose sight of that."

Schultz pledged his support for the Harsdorf-Fitzgerald-Friske-Stone amendment to curb veto powers. "I am hopeful we will garner bipartisan support," Schultz added. He said the Senate will do it's "level best" to get the amendment passed for the first time this session.

Meanwhile, Schultz said he and his colleagues will continue to deliberate on whether to pursue a lawsuit. "What's important for us to keep in mind is what the taxpayers expect from us," Schultz said. "All of us who understand the legal ramifications of what we're doing know it can't be done with a snap of the fingers.''

Asked what importance AG Peg Lautenschlager's opinion on the vetoes, which would be advisory in nature, would play, Schultz said, "The attorney general's comments will be noteworthy, but I don't think they'll be the determining factor as we move forward with this decision."

While he admitted that he hasn't talked to Doyle personally about the vetoes, he said he can tell all he needs to about the governor's state of mind by his public statements. Doyle was determined to increase education spending, Schultz said, "and I think he saw an opportunity and he took it."

As for the possibility of an override, Schultz said the reality check is a governor's veto hasn't been overridden in 20 years. "Given what is practical reality, that's not our first choice ... But we haven't sat down as a caucus and had that discussion."

Budget observers indicate that Gov. Jim Doyle’s failure to update the Chapter 20 appropriation schedule to reflect the influx of education spending could be grounds for a challenge. Doyle’s veto increases school aids by $155 million in the first year of the biennium, and $175 million in the second year.

“I don’t know if legally money you can be spent on programs because it would violate the Chapter 20 area,” said a GOP staffer.

“The big question as to whether once he’s moved it to school aids he has the authority to spend it, because he didn’t change the figure in the (Chapter 20) schedule for school aids,” says a budget observer familiar with the power of the veto pen.

“The question is whether, unless you change figures in the schedule, you can spend more,” the source said. “What you’re allowed to spend is set in those schedules.”

The observer points out with humor that most of the language Doyle vetoed to create the transfer was his own, language the Legislature left in there with only minor changes.

“The separation of powers is an interesting argument as well,” said the observer. “I think there’s certainly an issue there, the Legislature is the body that appropriates, and here (the governor’s office) is asserting they have wide authority to appropriate.”

“Tommy was aggressive in his vetoes and certainly he was, but I think this goes beyond what Tommy did and I wouldn’t be surprised to see a challenge.”

See the final budget document, including Doyle's vetoes.

Legislative Republicans hinted last week that some outside groups may lead the legal charge to challenge Gov. Jim Doyle's vetoes.

While there seem to be some mighty angry special interests, especially health care providers, those contacted by WisPolitics don’t sound eager to jump into the fray.

As one lobbyist said, “This is all about the separation of powers and what’s the prerogative of the executive and what’s the prerogative of the Legislature. Why you’d have special interests involved in that issue is beyond me.”

“The vetoes that I’ve looked at don’t appear to be any different than vetoes that governors have undertaken in the past,” said another lobbyist.

“I doubt we would do that,” said a rep from a health care organization. “I don’t see us playing that role. It’s a combination legal/political strategy, and I really don’t see any organization playing a part in it.”

One legislative lawyer also played down the possibility, saying: “At first glance it appears to be not quite different than other partial vetoes exercised by previous governors. The nature of a partial veto and cobbling together of words is not unusual.”

The Doyle administration has maintained that it did nothing that previous guvs, including longtime GOP Gov. Tommy Thompson, hadn't done before.

The Governor's Office provides this list of veto precedents to back up their argument, plus this list of quotes from Supreme Court decisions.

Immediately upon hearing about the $90-plus million medical assistance transfer, money that Doyle referred to as “pork,” Republicans made noise about attempting a veto override. But legislative sources indicate no timetable for an override vote.

The fall legislative session is due to begin Sept. 20.

Doyle's "pork" comment did ruffle some feathers among health care providers. "Since when is Medicaid ever described as pork?" says one disgusted pharmacy lobbyist.

The lobbyist estimates that Doyle's vetoes will cost each pharmacy across the state about $50,000 on average, a sum that could make or break many providers. "It makes it difficult for some pharmacies marginal in the first place to continue to serve," the lobbyist says. The impact will be felt by the consumer, the lobbyist warns. "Seniors will go into their local pharmacy and find out it's going out of business or not accepting some programs because they can no longer afford to."

One GOP staffer says the Medicaid vetoes are a winning issue politically. "There should press releases all over the place to remind seniors that Doyle cut them."